European Commission proposes draft Regulation on online platforms and

On 26 April 2018, the European Commissionproposed a draft EU Regulation on key aspects of the contractual relationship between online platforms and their business users. The aim of the proposed Regulation is to create a fair and transparent business environment for smaller businesses and traders that use online search engines and online platforms to reach consumers. The proposed Regulation would be the first EU legislation to specifically address business-to-business relationships of this kind.

The proposal concerns three topics: (i) increasing transparency by online intermediaries for the benefit of business users; (ii) encouraging non-judicial dispute resolution between online intermediaries and their business users and (iii) several mechanisms to monitor the effects of the new rules. The broad definition of "online intermediation services" means that the proposed new rules would apply to online platforms and search engines that offer services to business users established in the EU if those business users offer goods or services to consumers in the EU.

The proposal would require online intermediaries to put in place terms and conditions which are easily accessible to business users and which set out objective grounds for termination of services. For example, online intermediaries would need to provide information on (i) the data generated through their services; (ii) the use of most-favoured-nation clauses and (iii) the general criteria used for ranking search results, including a description where ranking is influenced by giving direct or indirect remuneration. Online intermediaries would also need to establish an internal system for handling complaints by business users. If a complaint cannot be resolved by means of the internal complaint-handling system, the online intermediary is obliged to engage in mediation in good faith with the business user.

The Commission's proposal is just the first step in the EU legislative process. The proposal will now be sent to the European Parliament and Member States where amendments to the proposal can be adopted.

This article was published in the Competition Law Newsletter of May 2018. Other articles in this newsletter:

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